Earlier this week I had the chance to sit down and meet with a few members of the Brightcove team, including founder and CEO Jeremy Allaire. We discussed the direction that online video was taking and the stratification seen between consumer and professional markets. And perhaps most interestingly, Allaire was willing to discuss the failures that Brightcove (and the online video space as a whole) has had to grapple with.

Since its launch in 2005 Brightcove has accrued customers spanning television, print media, and the music industry, who use the service to manage their online video content. The company has also seen a rapidly growing base of customers from more unlikely verticals, including biotech the pharmaceutical industry. And the service has seen explosive growth abroad, with foreign markets now accounting for 20% of the company’s revenues after only one year.

But despite the company’s success, there is still widespread confusion as to what Brightcove and other video platforms actually do. For years, many people have lumped services like Brightcove alongside consumer portals like YouTube and Metacafe, but the two represent entirely different markets.

In reality these services have little in common besides a Flash-based movie player. Brightcove and its competitors offer a cloud-based software service that caters to the professional market, essentially allowing companies to outsource their online video component. This extends beyond just a media player – Brightcove also manages advertising analytics, ensures that content is properly “plugged in” to the rest of each customer’s site, and offers a set of content management and programming tools. Conversely, YouTube et al. are geared towards amateurs looking for a place to easily put their content on the web.

Much of the confusion stems from semantics – both sets of services could be called “video platforms”. That said, Brightcove is also partially responsible for the confusion, as it actually did used to offer a YouTube-esque consumer site called Brightcove.TV that was put on the backburner in late 2007. The company has since shifted its full attention to its B2B offering.

While Brightcove has seen more than its share of success, underperformers like Brightcove.TV have made it clear that online video may not developed exactly as the company hoped it would. When the market first began to take off, there was a widespread belief that millions of prospective amateur content creators would be able to monetize their videos, driving a massive stream of long tail revenue. Allaire says that this has largely failed to materialize – while there have been some successful video creators, the concept of a long tail video market simply hasn’t become a viable business.

Another area where online video distribution is largely failing is in the transition from the computer to the television. Allaire explains that he envisions a “democratization of video” that hasn’t happened, largely because of proprietary formats and licensing issues that have plagued the industry. Because there is little Brightcove can do to address the issue, Allarie has written an open letter to the consumer electronics industry, but it’s unlikely we’ll see the open standards we all long for any time soon.

Finally, Allaire acknowledged that the idea of for-pay online content has been largely a failure (though he says this is less of a disappointment). Brightcove invested heavily in producing a platform for paid media content, but the market for this hasn’t materialized. He says that even well received marketplaces like Apple’s iTunes TV and Movie stores have seen disappointing results, and we probably won’t see a wider adoption until the consumer electronics industry breaks down the aforementioned barriers.

Over the next few months, Brightcove will be rolling out its gutted and rebuilt third revision to the public (the new version is currently in a private beta). From there, Allaire predicts that the site will continue to make inroads internationally and with with less “conventional” media creators as more companies turn to video platforms to handle even occasional content posts. Other players in the video platform space include Maven Networks, Move Networks, Delve Networks, and Ooyala.

You could say we were less than enthused when writing about the launch of Graspr last September. The nascent instructional video site captured our attention because it was led by an ex-Yahoo VP, but it didn’t really do anything to stand out from the crowd.

It turns out we weren’t the only ones to notice the service needed a little something extra. Graspr has shifted its strategy away from developing a destination site for instructional videos and towards an aggregation and syndication network for those videos. Along the way, it has also picked up $2.5 million in Series A funding from Draper Fisher Jurvetson and angels. And it’s rolled out a new design with additional functionality centered around what it’s calling “connected learning”.

Graspr now has a feed tool that pulls instructional videos from across the web and includes them in its repository of content. These videos fall into 17 categories such as home improvement, food and drink, sports and recreation, and crafts. They are then syndicated out to a network of publishers that want to compliment their existing content. About 200 such publishers have signed up during a closed beta period of the syndication service, although CEO Teresa Phillips thinks there are about 2,000 sites per category that would make good partners. These are mostly sites that provide text-based instructions and want to integrate more rich media into their offerings.

As for making money off this network, Graspr intends to run video overlays and split the revenue three ways between itself, the content producers, and the end publishers. There is also an opportunity for advertisers to sponsor video players and wrap them in their branding (apparently educational service companies are the most eager to build their brands in this manner). In the longer term, Phillips anticipates that product placement will become an increasingly important way for Graspr to monetize its videos.

Will the strategy succeed? It’s too early to tell, but if Brightcove is any indication, Graspr should resist setting its expectations too high. We hear that its syndication platform – albeit intended for a broader range of content – has been only a modest success. Perhaps Graspr will find that its publisher niche is particularly eager to integrate 3rd party video content – especially if that video can be monetized effectively.

Not a week after we derided Brightcove for its difficult user interface in a story about newly emerged competitor Delve Networks, the Cambridge-based video hosting company is releasing a completely rebuilt version of its service into private beta.

Existing SaaS customers now have the opportunity to try out Brightcove 3 Beta, which will be made available to new customers sometime in the Fall. Development on Brightcove 3 began about nine months ago and has focused on three primary areas: a new publishing model, support for long-form video and, last but not least, an improved user interface.

The new publishing model centers around Brightcove’s first server-side API, which allows publishers to deeply integrate video meta data into their display pages. Publishers can choose to highlight related videos in ways that make the most sense for their content (perhaps by organizing them into lists that can be browsed by topics or names). They can also display descriptions, and choose URLs, that optimize SEO. As far as monetization is concerned, in-page advertisements can be synchronized with in-video ads to make for more effective impressions.

Brightcove has never put any limits on the lengths of the video uploaded to its platform, but until now it never tailored the delivery of longer video to users’ technical capabilities. The new version places Move Networks (a platform that specializes in the delivery of long form video) in its sights by adjusting delivery quality based on bandwidth and computational power. Brightcove wishes to become the single platform that publishers use to deliver both short and long form content, without requiring users to install a proprietary plugin, as Move Networks does (Brightcove delivers its video through Flash).

Finally, Brightcove 3 has been blessed with a new user interface that doesn’t require publishers to skip around between tabs to address different parts of the setup process. An iTunes-looking control panel takes advantage of drag-n-drop and batch editing capabilities, which should streamline the addition and editing of videos.

Brightcove is certainly one of the biggest, if not the biggest, video platforms for web publishers. According to internal statistics, the videos on its platform are viewed by 135 million uniques per month, and revenues experienced 500% growth in 2007. Publishers include Discovery, National Geographic, Showtime, and several other big media companies.

The company hopes that this release will help it expand internationally (it already has a strong presence in the UK and has taken direct steps to establish one in Japan). Brightcove is also soliciting non-media companies like non-profits and governmental organizations in addition to integrating more deeply into existing publishers’ websites.

The Pluggd team is used to switching gears. The startup began in February 2006 as a destination site for podcasts. But after witnessing iTunes “suck the air out” of the market, it began developing speech recognition technology for video that could identify particular topics within news clips and other diverse content.

The venture, which was started by two former Amazon Web Services employees, has taken another step in the video direction by launching a full-blown Brightcove competitor called Delve Networks. Development began in earnest about ten months ago when Pluggd raised its Series A; the site went live just yesterday.

Like Brightcove – and several other platforms such as Maven Networks, Move Networks, and Ooyala – Delve Networks wants to manage and deliver video content for medium and large web publishers. Its management panel places uploaded videos into channels that are delivered through a customizable Flex-based player. Videos can be tagged, sorted into genres, and viewed through filters. The entire management experience is meant to be a large step up from that of Brightcove (and having suffered through Brightcove’s confusing user interface myself, Delve’s UI certainly appears much more intuitive).

Delve Networks is still putting the pieces together on some of the functionality publishers have come to expect, like analytics for tracking how videos are consumed. But the company has already rolled out is its primary differentiator: the same in-video topic highlighting technology it developed earlier while called Pluggd.

Publishers have the option of attaching a heat map of sorts to their videos. The map shows up below videos as a variously colored bar, which ranges from blue to red and activates when the user types in a particular topic. For example, if you’re watching a clip about a golf tournament, you can enter “Tiger Woods” and the bar will show you where the commentator spends time discussing and showing footage of that famous golf player. The topics are automatically detected by a combination of speech and contextual analysis, so publishers don’t have to break down their videos manually.

CEO Alex Castro tells me this technology engages viewers more effectively, and therefore monetizes them better as well. While the company is still working on the player’s user interface (and moderation panel for that matter) it has already signed up several beta customers including CNET, Intel, Small Screen Network, Jaudible, Bikini.com, and Wallstrip. Pricing has yet to be nailed down completely, but a free version for trial purposes will be made available in the next few weeks.

Web video distribution player Brightcove is entering the Japanese market with a new subsidiary called Brightcove K.K. Rather than use some of the $86 million it has already raised, Brightcove sold off a piece of the subsidiary for $4.9 million to Japanese investors, some of whom will also act as sales and distribution partners. Participating in the round are Dentsu (biggest advertising company in Japan), J-Stream (biggest content delivery network in Japan), Cyber Communications (biggest online ad network in Japan), and existing Brightcove investor Transcosmos (Japanese media conglomerate).

Brightcove CEO Jeremy Allaire says in an e-mail:

Japan is an outstanding market for Brightcove, with exceptionally high broadband penetration rates and the 2nd largest media market in the world. Amazing, online video (commercial, monetized online video) in Japan is a nascent industry

We have majority ownership and control over this subsidiary, and will be hiring a general manager as well as a staff of technical, sales, marketing and operational staff to build the business.

However, Brightcove K.K. also has several significant strategic partners who are collectively investing about $5M into Brightcove KK, and who are also going to act as sales and marketing agents for Brightcove in Japan. We don’t plan to build a lot of direct selling infrastructure in Japan, instead leveraging the robust sales teams and customer footprints of our partners.

J-Stream will be offering Brightcove video streaming as a service to its customers, while Dentsu and Cyber Communications will be selling ads across the Brightcove K.K. network.

Investors are betting big on video streaming provider Move Networks. The Utah-based company just announced that it raised $46 million in a C round of venture financing. The round was led by Benchmark Capital, and also included Cisco, Comcast Interactive Media, Televisa, Steamboat Ventures and Hummer Winblad Venture Partners. That brings the total raised since December, 2006 to $91.3 million. (Competitor Brightcove has raised $86.2 million and Maven Networks was bought by Yahoo for $160 million in February).

When it comes to streaming HD video on the Web, Move Networks is becoming one of the preferred video streaming partners for many major media sites, including ABC.com, Discovery.com, ESPN.com,and Fox.com. According to the company, it collectively streams videos to 6.5 million people a month, who average 50 minutes of viewing time per session. But Move requires that viewers install its own proprietary video player as a plug-in to their browsers. So in a way it competes with Flash, which is getting better all the time. (Brightcove is taking a different approach by experimenting with BitTorrent and other technologies to create high-quality video experiences through a Flash player). High-definition streams still tend to run into network bottlenecks and slow connection speeds at people’s homes. Whoever can solve or bypass these problems will become adopted by more video sites as the demand for HD video rises.